Advertisers rely heavily on access to third-party data to plan and launch targeted campaigns, but new Federal Communications Commission (FCC) rules about this type of data usage are poised to make significant changes to this practice. In the marketing industry, data is considered a key tool, with first-party data providing details garnered by your own company—such as customer habits and preferences—and third-party data offering supplementary information from outside sources.
The major difference between these two types of data is that the customer who agreed to provide their data did not expressly agree to receive communications from your company when it comes to third-party data.
The FCC recently announced new regulations that affect access to that third-party, or aged data, within advertising. The updates necessitate on-to-one written consent when it comes to lead generation. Although interpretation of this rule varies by industry, the core effect is that data-collecting businesses are barred from reselling the acquired data with a marketing goal in mind. Contextual communication with the customer is only authorized by the business that the customer directly requested contact from.
The FCC update sparked overwhelming concern among confused clients and vendors. Most wanted to understand what the changes meant and how they would affect leads. According to Scott Aronson, former vice president of the Better Business Bureau and owner of SunRev, an increase in regulation is an outcome of industries failing to self-regulate. Aronson argues that this can be demonstrated by a consistent rise in phishing texts and home selling requests. He added that the intended use for gathering customer data had been lost- to comprehend more about our customers’ behaviors in an effort to provide better solutions, not to attempt hard sell approaches.
Nevertheless, it seems that this hard-hitting advertising strategy does yield results for various industries. If customers are finding suitable solutions to their problems, is the data usage entirely negative? The answer is not simple. It largely depends on how the data is used and to what extent it intrudes on the customers.
That being said, a more effective, less intrusive way to use the collected data could exist. Through the use of AI and programmatic advertising channels in digital marketing, businesses can access third-party data streams and target users in their daily online journey through various platforms such as digital radio, CTV, pre-roll videos, in-game native ads, and traditional display. This presents opportunity for businesses to build a persuasive media mix and convey their ad to someone who may be interested in their product/service. Also, it gives users autonomy to decide whether they’d like to engage with the business on their own terms, which could positively impact the customer’s brand perception.
Lastly, the acquisition of aged data is not cheap, and costs quickly mount when considering all the effort that goes into customer service call centers, dialers, email campaigns, and text messaging outreach. Transitioning to a more customer-friendly approach may not directly generate the desired leads for every dollar spent, but the investment will deliver important feedback and valuable customer information. It also means that aged data isn’t completely redundant and could simply use a makeover to align with the new FCC rules.
